Is Toronto’s housing crisis reaching a breaking point?

Daryl Gonsalves –

Housing has quickly risen as a top concern due to surging rents, lack of affordable units and rapidly increasing real es­tate prices. The recent rise in interest rates has subdued de­mand in the housing market, but on the supply side, cumbersome zoning and permitting regula­tions, escalating insurance and construction costs, and a critical shortage of skilled workers are limiting housing supply. With potential interest rate cuts on the horizon, there is potential for more dramatic changes in the real estate market in the future.

Interviewing Downtown East residents, I found that people are postponing plans to have chil­dren, making difficult compro­mises on their living situations, limiting their career choices, and questioning how long they can afford to remain in Toronto. To respond to these social and economic impacts, the city has introduced a program to deliver additional rental housing. How­ever, critics argue more action is needed.

A new family In the Down­town East that welcomed their first child is excited at the pros­pect of having another. Howev­er, upgrading to a full two-plus bedroom apartment would put their financial sustainability at risk. A working healthcare professional wishes to relocate closer to her job but cannot af­ford market rent if she exits her rent-controlled unit. And a low-income student attending George Brown College is sifting through basement shared rental units while lamenting that he cannot afford a sun-filled home.

Each level of government in Canada is attempting to re­spond to the housing crisis, but data shows that the current pace is insufficient. On the federal level, the government has re­moved the goods and services tax from new rental apartments and co-op projects. Provin­cially, the Ontario government has moved to deliver addition­al density around transit hubs and underutilized stations. Mu­nicipally, Toronto has adjusted zoning regulations to enable multiplexes (up to fourplexes) on land previously dedicated to single-family homes (i.e., de­tached, semi-detached and row houses).

Two distinct housing crises are occurring in Toronto. First, low-income, marginalized and vulnerable residents cannot ac­cess affordable and supportive housing. Second, rising rents have made it increasingly un­affordable for middle-income earners and key workers to live in the city that they work in.

City Council has committed to support 65,000 rent-controlled homes by 2030. To date, the city has supported the approval of 21,000 affordable rental homes through the Open Door Afforda­ble Rental Housing program.

To achieve the city’s goal of 65,000 rent-controlled homes by 2030, Mayor Oliva Chow has proposed a new Rental Housing Supply Program that would allo­cate approximately $351 million to 18 affordable rental housing projects, starting construction in 2024 and 2025. This invest­ment is expected to deliver al­most 6,000 new rental homes and encourage housing partners to support new rent-controlled homes. A key component is es­tablishment of a framework that would recommend capital fund­ing for rental homes, up to a maximum of $260,000 per unit.

On June 26, City Council ap­proved the Rental Housing Sup­ply Program. With staff citing a growing trend of “renovictions” in Toronto, council also voted to create a bylaw to prevent land­lords from using renovation to evict tenants in bad faith, in or­der to raise rental prices.

The new bylaw will follow a similar move by the City of Hamilton that is going into effect in 2025. Landlords would have to secure all building permits and provide an engineer’s report confirming that renovations re­quire vacancy before evicting tenants. Landlords would also have to work with tenants who wish to move back to their units after the renovations.

Key elections will occur in Canada in the next couple of years. Mayor Chow, who faces a 2026 election, is calling on other levels of government to expand rent control and support the City to meet their 65,000 rent-con­trolled homes target by 2030.

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